Would Justin Welby be embarrassed to own shares in my bank?

The financial sector as a whole isn't the most salubrious industry to be in.

Last month, I took out a loan that had an effective APR of 243,333 per cent. But I didn't go to a payday lender to do it. Although the worst of them do offer loans with interest rates in the hundred thousands, a more typical cost of a payday loan is something like Wonga, which cites a representative APR of 5,853 per cent on its website.

No, instead, I took out an authorised overdraft at my bank. I didn't mean to, you understand; a Kickstarter project I'd backed finished, and charged me about £15. The email was caught by a spam filter, and I'd forgotten it was coming, so my mental accounting was thrown out of whack. By the time I found out, I'd been overdrawn by 17p for two days. For that privilege, my bank charged me the princely sum of £2.

Just for comparison, Wonga themselves, the arch-villain of the day, would have charged me a third of a penny, if they did loans that small, though their handling fee would have been much larger.

In my defence, I'm not an entirely ignorant consumer. The bank account I have does have punitively high interest rates if you go slightly overdrawn, but at the same time, it pays me money for being in credit (something you won't find all that frequently these days). When I'm not an idiot, the two balance out to leave me slightly better off.

But it does leave me wondering at how we pick which companies are evil. Justin Welby, the archbishop of Canterbury, today says he is "embarrassed" to discover that the Church has a financial stake in Wonga. On a scale of one to ten, his embarrassment ranks "about eight", apparently. But where would an investment in my bank rank? Or is a bank a respectable institution, above criticism, even when the numbers involved tell a different story?

Part of the answer is that the numbers involved don't, in fact, tell the whole story. Quoting the interest rate for my bank is misleading: a better way of phrasing it is to say "I am charged £1 for every day I have an authorised overdraft between £0 and £500". The only reason why my effective APR was so high is because the amount I "borrowed" was so low. But for payday lenders, there's also other ways to phrase it which are less misleading. Wonga, for instance, charges interest of one per cent for every day the loan is taken out, plus a flat handling fee.

But there's also a question of business practices. It's fair to say that advising students to take out a payday loan instead of a student loan, for instance, is not particularly ethical. But then, neither is systematically selling insurance to people who don't need it and will never be able to claim on it, or lying about how much lending costs you in order to boost your profits. It's the financial sector as a whole which could do with a healthy dose of ethics, it seems.

A sign outside a 'Speedy Cash' cash loans shop on Brixton High Street. Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

Photo: Getty
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The beggar used to be friendly – now he was ranting at everyone

What was I doing, dismissing him with maximal curtness – and not caring?

The first beggar was walking but still wretched. Probably in his early twenties, clearly ravaged by more than just alcohol, he made a beeline for me, as if he had an appointment. He was not to know that I was in a mood from hell, though the look on my face would have told him, if he’d been in any kind of state to register it.

“Excuse me, have you got 10p for…”

“No.” And I walked on.

Why? I am almost invariably a soft touch for this kind of thing. But as I said, I was in the foulest of tempers.

Also, this was East Finchley. For those who do not know London, East Finchley is a northern suburb, which at one end hosts the wealthiest street in the country – the Bishops Avenue, where multimillionaires tear down houses and erect new ones even uglier than those they have replaced – and at the other end a typically seedy, dull collection of terraced houses.

The main supermarket is Budgens, a name so ungainly that it could only have belonged to a real person, either too proud or unimaginative to think of something else.

But what, I asked myself, was someone this wretched doing in East Finchley? And what was I doing, dismissing him with maximal curtness – and not caring?

The second beggar, further up the street, I met the next day: much older and clearly mad, rather than chemically poisoned. He asked how I was doing.

“Not so well, as it happens,” I replied.

“Would you like me to say a prayer for you?”

“Why not?” I said, and he placed a clenched fist to my forehead and made a brief incantation, something like an exorcism, and then kissed the large white plastic crucifix hanging from his neck.

I half-expected to feel a jolt of faith, some kind of divine restructuring. This time I gave him money: a pound coin and a 50p coin. But then later I thought: why didn’t I give him more? I’d been doing some tidying earlier and had retrieved a heavy pocketful of change; I could have given him a generous handful.

The third beggar was in Shepherd’s Bush. I knew him from the days when I lived there: a skinny, middle-aged guy who would occasionally stop and rant in a friendly way at me, just sane enough not to ignore. That was ten years ago. Now he was raging at everyone, accusing the teenagers queueing in the kebab shop of being batty boys and saying “bloodclaat” a lot. (Batty boy: homosexual. Bloodclaat: tampon.)

The people he was addressing knew perfectly well what he was saying. They shrugged it off. I got on the bus; so did he, and the whole bus knew about it. There was nothing friendly in him now, and I wondered through which hole in the increasingly threadbare welfare safety net he had been allowed to slip.

That’s it, I thought. I’m getting out of London, its pampered core oblivious to the surrounding anguish. The world in a nutshell. Luckily, my great friend S— had asked if I could cat-sit for her in Brighton. I know her cat, and I know Brighton. Also, I know about a dozen people there who I keep meaning to see, so why not? London was making me ill, and possibly a bad person. So S— invited me down a couple of days before she was due to go on her holidays, and I took the first train I could.

And now I find myself sitting on a sunlounger in a tiny backyard, in a charming house just abutting the North Laine, and the mood is palpably different to the capital’s. It is like a city ought to be: compact, diverse and funky. There is no reek of High Capitalism. It is healthily decadent. It would appear to be full of people who have rejected the idea of London. It still has an enormous number of beggars, but more people were dropping money for them than I ever saw do so in W1, W12 or N2.

So this is what it’s like to fall out of love with the city of one’s birth. What most surprised me was the speed and force with which it happened. I’d made my mind up over a nice lunch that my friend N— was buying me, to cheer me up.

“Don’t you have to stay in London? You know, for book launches and things like that?”

“I don’t go to fucking book launches any more,” I said. I was taken aback by the vigour of my reply. I’m only here for ten days but I have plenty of people to see and dozens of memories, all good, to bump into. I’m already feeling better. 

Nicholas Lezard is a literary critic for the Guardian and also writes for the Independent. He writes the Down and Out in London column for the New Statesman.

This article first appeared in the 14 September 2017 issue of the New Statesman, The German problem